Dealing with an employee resignation can be difficult, especially if an employee leaves on bad terms, and has a several more weeks or months to work during their notice period. However, it is imperative that employers respond in the correct manner to ensure that departures are handled smoothly and with minimal disruption to their business.
Here is some guidance on some of the steps you should follow when receiving an employee’s resignation:
- Ensure that the resignation and the date of resignation is confirmed in writing. Verbal resignations given in the heat of the moment, can in some circumstances, not amount to a legally effective resignation. Employers should consider allowing a “cooling off” period of a day or so before seeking written confirmation from the employee of their resignation, setting out specifically their last day of employment. If a resignation is given in the heat of the moment, and an employer refuses an employee to retract it shortly afterwards, it could lead to an unfair dismissal claim. Also, in absence of written evidence of the employee giving their resignation, there is a risk an employee will attempt to portray themselves as having been dismissed by the employer, as opposed to them resigning, in support of an unfair dismissal claim.
- Determine the employee’s specific final day of employment depending on their contractual or statutory notice period (whichever is greater), and their entitlements and benefits for the remainder of their notice period. You should also decide whether you wish the employee to work all or part of their notice period or receive a payment in lieu of notice or are placed on garden leave and ending their access to employer IT systems for all or part of the notice period. This will serve to minimise disruption to the business or protect its position. An employer’s powers in making a PILON or placing an employee on garden leave depend on the express terms of the employee’s contract, and any breach of contract could form the basis for a wrongful dismissal claim by the employee, and potentially release them from post-termination restrictions.
- Acknowledge your receipt of the resignation formally in writing by confirming:
- the employee’s notice period and when their last day at work will be
- whether they should work all or part of their notice period
- final pay, including any unused holiday entitlements, overtime or bonus payments, and any implications regarding any share options or other equity, such as if they are treated as “good” or “bad” leavers under such schemes
- a reminder of their ongoing obligations of confidentiality towards the employer, and obligations on termination including the return of company property and compliance with any post-termination restrictions, and
- anything you expect from them before they leave, including reasonable co-operation in the handover of duties, or completing certain tasks or projects before their departure. Although the employee is working their notice period, they remain employees and contractually required to follow reasonable instructions of their employer and can still be disciplined for poor performance and/or misconduct in their notice period.
By discussing these points with the departing employee, the risks of misunderstandings or disputes are minimized.
We also recommend agreeing with the employee, particularly senior or influential employees, the terms of an announcement and its timing to other staff and external client and suppliers concerning their departure. The employee should be restricted from communicating with colleagues and external contacts outside the terms of any agreed announcement, as it gives them scope to create their own narrative as to their reason for leaving, and a platform for competing against their employer in the future.
If the employee has raised allegations in their resignation letter, it may be necessary to meet with the employee to discuss these issues as an exit interview and invite them to raise a formal grievance if they wish to pursue these complaints further. Very often, employees will send a parting shot resignation letter as part of a claim for constructive dismissal, therefore how the employer responds and manages the allegations will be relevant in defending any future claim. A well-prepared grievance investigation can have the potential to rebut any allegations and be the evidential basis for the employer to defend any constructive dismissal complaint in the tribunal.
Crucially, you should keep in mind that dealing with resignations is an essential part of managing a business. You should aim to streamline the process and implement a uniform way of handling resignations correctly. This should allow you to remove a significant amount of discomfort from the situation, enabling you to focus on recruiting suitable replacements.
If you need further advice on handling employee resignations or are seeking general Employment advice, contact our team of expert employment lawyers.
